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CMA Final · Indirect Tax Laws and Practice · Anti-profiteering

Under Section 171 of the CGST Act, 2017 as amended, which statement about the Authority examining whether the benefit of tax rate reduction or input tax credit has been passed on is correct?

The Government may, by notification on the Council's recommendations, fix a date after which the Authority will not accept any request for examination. The other statements are wrong because the Authority includes the Appellate Tribunal, covers both input tax credit and rate cuts, and is set up by the Central Government.

  1. AThe expression Authority excludes the Appellate Tribunal
  2. BThe Government may notify, on the Council's recommendations, a date from which the Authority will not accept any request for examinationCorrect
  3. CThe Authority can only examine reduction in tax rate and not input tax credit
  4. DThe Authority is constituted by the State Governments on the Council's recommendations

Explanation

The proviso to section 171(2) allows the Government, on the Council's recommendations, to notify a date from which the Authority shall not accept requests for examination. Explanation 2 says the Authority includes the Appellate Tribunal, so the first option is wrong. Section 171(2) covers both input tax credit and rate reduction, and the Central Government constitutes or empowers the Authority.

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